Pass The 65: A PLAIN ENGLISH EXPLANATION TO HELP YOU PASS THE SERIES 65 EXAM - UPDATED FOR 2017

If you think a stock is going to sit still or possibly rise, you sell a put.

A step-up bond makes higher interest payments in the future compared to the initial payment.

Reg SHO now requires that before executing a short sale, broker-dealers have to locate the securities so that the laws of supply and demand are not distorted by “naked short selling,” in which people sell stock that doesn’t even exist short, artificially depressing its price. If the broker-dealer executes a short sale without reasonably believing t

Another product divided into tranches is the CDO or Collateralized Debt Obligation. A CDO is a structured asset-backed security paying cash flows to investors in a predetermined sequence, based on how much cash flow is collected from the package of assets owned.

The Series 65 could ask you to figure the breakeven point, the maximum gain, or the maximum loss for either the buyer or the seller of the call. Those are all hypothetical situations. Sometimes you calculate what actually happened for an options investor; sometimes you figure out what could happen. If the test is talking about breakeven, maximum ga

If the test asks, “Which of the following is not a security?” look for one of the bulleted items above. Or maybe they’ll make you stretch a bit further and ask you, “Which of the following is least likely to be an investment adviser?” If so, remember that if the advice is on one of the bulleted items, we’re not talking about an investment adviser.

The rental income from your rental property is called passive income. Yes, you meet the plumber over there on your lunch hour and lose some sleep over the rowdy new tenants, but you don’t actively “work” for that rental income. You hold title to the property and you let the property work for you. Passive income.

A test question might ask what a client should do if he has a stock that has appreciated significantly and one that has gone down in value. A good tax move might be for him to donate the appreciated stock to a charity and sell the loser for a capital loss. This way he will avoid a capital gain on the appreciated stock while also getting the donatio

Common stockholders have a pre-emptive right to maintain their percentage of ownership.